Xerox Corp. will focus in 2002 on building services that would return the company to profitability, its president says.

The embattled office equipment maker’s president and CEO Anne Mulcahy says Xerox will continue to move its office manufacturing operations and equipment financing services to external partners. Earlier this week the company demonstrated its back-to-basics approach with the announcement that it would spin off its Palo Alto Research Center (PARC) as an independent organization.

For Xerox Canada Ltd., this time is an opportunity to move forward, according to Jim Doherty, vice-president and general manager for Xerox Canada’s office systems group. Doherty says the digital colour market is a direction Xerox is committed to expanding.

“We now have the ability to analyze an individual office and its workflow and then recommend to the customer how they can do things cheaper,” he explains. “We’re no longer talking individual solutions, but also enterprise solutions.”

Doherty says Xerox Canada recognizes that its VAR channel is of critical importance to the company’s turnaround.

“Basically we’ll partner with anyone who has the expertise in the marketplace,” he says. “We have 15 software VARs nationally offering solutions in conjunction with us . . . we know we need the help of our extended partners to wrap up the solution for the customer.”

Another indication that Xerox Canada is moving forward, Doherty says, is the company’s new telebusiness centre in Halifax. The centre – which hired about 145 people and whom are being trained – will help increase Xerox’s Canadian sphere of influence, he says.

James Lundy, a research director with the Stamford, Conn.-based Gartner Inc., says the issue for Xerox is its execution.

“They’ve always done a good job with their technology, their products – it’s never been an issue. What has been an issue is their execution,” he says. “They’ll have to sell their global services initiative through multiple channels and not double count everything.”

It’s been a tough go for Xerox’s Mulcahy since taking over the reins last August from outgoing CEO Paul Allaire, who retired. Saddled with US$14.6 billion in debt, Mulcahy embarked on severe cost-cutting measures including laying off 8,600 employees, and eliminating free coffee and plant-watering services.

“She’s done a good job of constraining costs and streamlining our operations,” he says. “In Canada, we’ve had the least amount of turn-over this calendar year in our sales ranks. In fact, last October marked our largest revenue production in the last 10 years.”

IDC Canada research analyst Raymond Quan says Xerox should be chasing the high-end colour print market. “That’s their sweet spot,” Quan said. “They’ve got the technology, the infrastructure . . . it’s a question of execution.”

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